Frost & Sullivan Indonesia 2012 Indonesia Power Sector Outlook
 

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Frost & Sullivan's analysis on Indonesia power sector outlook for 2012 presented by Ravi K, Vice President, Energy & Power Systems at the Frost & Sullivan 2012 Indonesia Energy & Power Outlook ...

Frost & Sullivan's analysis on Indonesia power sector outlook for 2012 presented by Ravi K, Vice President, Energy & Power Systems at the Frost & Sullivan 2012 Indonesia Energy & Power Outlook Briefing, April 25 2012, in Jakarta.

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Frost & Sullivan Indonesia 2012 Indonesia Power Sector Outlook Presentation Transcript

  • 1. 2012 Indonesia Power Sector Outlook Energy & Power Systems Practice Frost & Sullivan Asia Pacific Jakarta 25th April 2012
  • 2. Executive Summary—CEO’s Perspective Potential investment for power1 generation is about US$33.5 billion by 2017 Capital expenditure on T&D expansion2 about US$11.1 billion Increasing bilateral cooperation for3 renewable energy development (i.e. Finland and New Zealand) With a 30% renewable energy objective by 2030, the medium term4 opportunity us about US$12.4 billion by 2020 Country investment rating upgrades5 generating more interest among global investors Source: Frost & Sullivan analysis. 2
  • 3. Indonesia Power Sector – Key Stakeholders 9330, 6% Energy Sold (GWh) by Type • The major consumer of energy is of Customers (2010) the residential sector. 78% of the Residential 59824, 41% production is by PLN and its50985, 35% Business subsidiaries, the rest 22% is by Industrial IPPs and captive power plants. Others • The IPP, merchant power and captive power market has to 27157, 18% develop further for Indonesia to meet the growing power demand Energy Production(GWh) • Distributed Generation will play a 38076, 22% in 2010 large role if Indonesia has to achieve full electrification PLN • Renewable Energy and Microgrid will meet some of the future demand PLN Purchase from IPP & Captive 131710, 78% Power Plant Source: PLN 3
  • 4. Indonesia Per Capita Electricity Consumption – Way to Go! The power consumption per capita is the lowest in the region despite the abundant natural resources present 14000 12000 10000 8000 kWh per capita 6000 4000 2000 0 Indonesia Vietnam Philippines Thailand Malaysia Singapore India China USA Source: World Bank 4
  • 5. Renewable Energy Market Development Challenges High capital costs limit market expansion 1Improper maintenance of Inconsistent government policiessystems affects end-user 8 confidence 2Limited local supplycapability makes the projects expensive Industry 7 Challenges 3 Lack of credit availability to technologies not well established in IndonesiaFuel and power subsidy 6threatens market reach 4 Low level of awareness hinders new 5 market opportunities Limited presence of trained system integrators curtails growth Source: Frost & Sullivan 5
  • 6. Market Outlook – Renewable Energy MixGeothermal dominates RE sourced power electricity production and will continue doing soup to 2016. Electricity Generation Mix Using Renewable Energy: Total Installed Capacity (MW) • Geothermal usage is100%= 1537 1728 1932 2390 2608 2914 3256 Solar expected to increase and Wind would become the 1% 1% 1% 1% 2% 1% 2% 1% 2% 1% 2% Biogas 12% 12% 14% Indonesia’s largest 13% 15% 16% 17% Biomass renewable energy electricity 9% 11% source that connected to 12% 12% 13% the main grid 15% 16% Co- • Biomass and cogeneration generationl is in second and third place providing significant electricity renewable energy source to Indonesian main 78% grid 76% 72% 72% 69% • Wind ,Solar and Biogas is 65% 62% not yet connected to main grid and each capacity is Geothermal below 2 % of total national RE capacity as it is in early stage of development. 2010 2011 2012 2013 2014 2015 2016 Source: Frost & Sullivan 6
  • 7. Market Outlook – Geothermal Power GenerationThe sector is expected to record an annual growth rate of 12.8%.Government has plans to invest heavily on the geothermal sector as part ofthe 10,000 MW fast track program. The IPPs are expected to be encouragedto invest in the geothermal projects. • The total installed capacity is Annual Capacity Additions CAPEX expected to be 2.3 GW by MW USD Million 2018. The sector is expected to grow at a CAGR of 12.8% 250 600 during the period 2008-2020. 500 200 • About 39% of the capacity (3,977 MW) in second crash 400 150 program will geothermal 300 • PLN is expected to share the 100 risks of the projects with the 200 private players. 50 100 • The Sarulla 1 plant in North Sumatra, with expected total 0 0 capacity of 3x110 MW, will be 2008 2009 2010 2011 2012 2013 2014 2015 2016 the biggest geothermal power Capex plants. Annual Capacity Additions 7
  • 8. Market Outlook – Solar PV The solar power market is expected to demonstrate significant growth beyond 2012 Annual Capacity Additions CAPEX MW USD Million • Potential Solar power in9 8.5 60 Indonesia is very large,8 reaching above 1 TW. 7 507 • Average radiation intensity of solar are 4.86 40 kWh/m2/day, 55 • Key drivers are 30 electrification of remote4 islands and substitution of diesel generators3 202 • Projects available are 1 101 mostly in pilot stage and for feasibility purposes. 0 0 00 0 2010 2011 2012 2013 2014 2015 2016 Source: Frost & Sullivan 8
  • 9. Market Outlook – Wind Energy No commercial scale wind farm has been built in Indonesia as it is in the early stage of development, most of the projects available are mostly for feasibility study purposes and prototype projects • Wind energy in Indonesia has potential up to 9.3Installed Capacity for onshore large CAPEX GWwind power systems USD MillionMW • Most of wind energy 20 40 projects are still at a pilot 18 project stage and more 18 35 studies are needed to 16 15 establish the commercial 30 scale wind projects. 14 12 25 • A private company Viron 12 10 Energy has signed a PPA 10 20 with PLN to build 10 MW wind energy electricity 8 plant in West Java. If 15 6 succeeded the capacity 10 will be increased 4 gradually up to 100 MW in 5 5 years time. 2 0 0 0 0 0 • PLN also started several 2010 2011 2012 2013 2014 2015 2016 projects but mostly for Source: Frost & Sullivan pilot projects purposes. 9
  • 10. Market Outlook – Biogas PowerThe CAPEX for biogas power in Indonesia was valued at $6.3 million in 2010 and is likely toreach $32.5 million by 2016 at a CAGR of 31.6%. Installed Capacity CAPEX MW USD Million • Biogas technology has been developed for quite14 35 13 sometime but subjected 12 more to waste control12 30 rather than electricity generators. 1010 25 • Electricity projects are 8 mostly localized small 8 20 capacity projects for own usage and not yet 6 5.5 15 connected to national main grid. 3.8 4 10 • Other projects also 2.5 developed by local cattle 2 5 cooperatives. 0 0 2010 2011 2012 2013 2014 2015 2016 Source: Frost & Sullivan 10
  • 11. Market Outlook – Biomass Power GenerationThe biomass power market was estimated at $ 53 million in 2010, and is likely to reach $213 million by 2016, at CAGR of 26.2 percent from 2010 to 2016 Annual Capacity Additions CAPEX • Indonesia estimated biomass MW USD Million energy potential: 49,810 MW (50 GW)120 250 • Utilization of biomass for100 97 electricity energy is still very 200 low, not yet connected to 85 main grid. Mostly used for 80 private own purposes 150 63 • Ministry of Energy and 60 55 48 Mineral Resources of short- 100 term programs include 40 34 promotion of investment, fiscal and tax incentives, 24 50 energy pricing policies, 20 information dissemination, and research and development. 0 0 2010 2011 2012 2013 2014 2015 2016 Source: Frost & Sullivan 11
  • 12. Market Outlook – Cogeneration The CAGR for CAPEX during the period 2010-2016 is expected to be around 17.3% with gas and coal fired dominates the type of energy used. Annual Capacity Additions CAPEX MW USD Million • Most of cogeneration100 160 installed capacity are90 86 combination of gas and 140 coal fired plants80 77 68 120 • Several of the upcoming70 projects will be industrial60 100 cogeneration for captive purposes 5050 47 80 43 • Opportunity for urban40 based cogeneration or 33 60 trigenerataion systems30 40 though quite compelling is20 still far from development 2010 0 0 2010 2011 2012 2013 2014 2015 2016 Source: Frost & Sullivan 12
  • 13. How does Indonesia compare in ASEAN for IPPs IPP Market: Proportion of New Capacity Addition by IPP (Southeast Asia), 2010-2015•Vietnam is expected to be the highestcontributor to the new additional capacity by 3.5% 10.2%IPPs between 2010 and 2015. It accounts for15,076 MW.•Indonesia is the second largest contributor, 37.8% 25.1%owing to the second phase of the 10,000MW acceleration program.•Thailand falls a little short of Indonesia withtotal of 9,336 MW. Installed by IPP’s 23.4% The Philippines Indonesia Thailand Vietnam Lao PDR Source: Frost & Sullivan 13
  • 14. Risk Evaluation of IPP Market in Indonesia IPP Market: Risk Assessment Summary (Southeast Asia), 2010 Source: Frost & SullivanFrost & Sullivan sees that Indonesia still country risk for IPP market is higher than Thailand and similar withPhilippine and Vietnam. The most critical risks to an IPP are market risk, land acquisition risk and financingrisk given the current scenario in Southeast Asia. 14
  • 15. Implications for Market Participants Java Bali The interconnection will drive more efficiency into the system and help to Sumatra better manage the discrepancies in demand supply with the anticipatedinterconnecti growth on Geothermal With average project cost at $2.4 to $3.2 per MW, which is lower than the power international costs, Indonesia can attract significant investments with moredevelopment favorable government policy support Since it is impossible to extend the grid to all far flung regions of Disbursed Indonesia, small scale off grid renewable energy generation should form aRenewables key part of Indonesian policy Other Other regional markets like Vietnam and now Myanmar are vying for Regional international financing in power sector. Without more liberalization of the Markets power sector Indonesia risks loosing out to other countries. 15
  • 16. Q&A 16